Hummingbird rejects Symphony, accepts Open Text bid

Open Text has agreed to buy Hummingbird for $489 million, prompting Hummingbird to reject a $465 million bid from Symphony Technology Group it accepted in May.

Open Text has agreed to buy Hummingbird for US$489 million in cash, prompting Hummingbird to reject the US$465 million offer from Symphony Technology Group that it accepted in May.

Hummingbird, a developer of enterprise document management and legacy network connectivity software in Toronto described the agreement reached with Open Text on Friday as "definitive."

However, that's also the term it used to describe its acceptance of Symphony's bid on May 26. Breaking off that deal cost Hummingbird a cancellation fee of US$11.7 million, it said.

A merger between Hummingbird and Open Text, which also makes software for managing corporate documents, would result in a company with over 3,400 employees around the world. The deal must win the approval of two-thirds of Hummingbird's shareholders at a meeting in September to go ahead.

Open Text reported net income of US$20.4 million on sales of U&S$415 million in the year to June 30, 2005, the last full fiscal year for which figures are available.

Hummingbird, in its fiscal year Sept. 30, 2005, reported a net loss of US$5.8 million on sales of US$236 million. Of that, sales of enterprise software accounted for $169 million, up 12.6 percent over the previous year, while legacy network connectivity software accounted for US$67 million, down 4.3 percent.

Symphony's plans to build a software conglomerate through acquisitions will be slowed by Hummingbird's change of direction. Earlier this year, it was on a buying spree, acquiring price optimization software company Metreo in January and marketing analytics company ImmediateFX in February.

Symphony also owns part of mid-range ERP (enterprise resource planning) vendor Lawson Software. That came about following Lawson's US$480 million all-share bid in June 2005 for Intentia International, a Swedish software company in which Symphony held a significant stake.

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